A flurry of economic data out of Japan on Tuesday showed an improving labor market and an encouraging household spending picture, alleviating fears over the impact of an increase in the national sales tax.
Household spending fell 3 percent from the year ago period, better than with the 3.8 percent drop forecast by Reuters and after the 8 percent slump in May.
But on a month on month basis, it rose 1.5 percent. While short of analysts' 2.2 percent forecase, it's still a reversal from the contractions seen in April and May.
Retail sales dipped 0.6 percent on an annual basis, slightly worse than than expected dip of 0.5 percent and after dropping 0.4 percent in May.
Japan raised its sales tax to 8 percent from 5 percent in April, in a bid to reduce the country's hefty debt pile.
In other data, the availability of jobs in Japan held at its highest in more than two decades. The jobs-to-applicants ratio rose to 1.10 in June from 1.09 in the previous month, data from the labor ministry showed, matching a high last seen in June 1992.